Kolkata: China has emerged a better capitalist than India as it was a better socialist, economist Pranab Bardhan said on Friday.
The socialist past of China, which could now be regarded as capitalist as two-thirds of its income were being generated from the private sector, provided a launching pad for what it was doing now.
Professor Bardhan, who teaches Economics at the University of California in Berkeley, was speaking at a lecture on “Awakening Giants, Feet of Clay: A Competitive Economic Assessment of India and China” organised here by the West Bengal Finance Department.
“The Chinese developed a solid base in social infrastructure, that is, health and education, and went through egalitarian land redistribution, ensuring a minimum rural safety net,” he said. “As a result, the churning and dislocation due to globalisation could be accepted more easily by people.”
China witnessed a “historically astonishing” decline in the number of poor people — by around 50 per cent between 1981 and 2004 — but it had less to do with the integration of that country into the world economy and more with the huge agricultural growth between 1981 and 1987 generated by land reforms.
Professor Bardhan lauded China’s use of the poor, unskilled labour to bolster its manufacturing sector — garments, toys and shoes — and the fact that a significant part of female labour contributed to economic activities.
While India could take advantage of the “demographic window of opportunity” as it would have more workers and fewer dependents than China beyond 2010, much would depend how productively it employed its workforce. “Currently, a quarter of the 15 to 24 age group entering the labour market in India is illiterate, while it is almost none in China.”
Professor Bardhan, however, predicted a potential for urban unrest in the booming Chinese cities despite the government’s remedial measures to stem discontent. “One must remember that China executes more people in one week than India has in the past 60 years,” he said.